SD: Mark, you’re not like other CFOs. You have gone in and out of being CFO so many times, and because you’ve been on multiple sides of the board table, I felt it would be interesting to hear your perspective. So to start off – which job do you prefer – the CFO Job or the outside advisor job?

MM: It’s not as simple as that. I live to do two things – One is to advise founders and management teams, and the other is to do complex financial transactions. The thing that I liked about being a CFO at start-ups is that they were often in need of both. When I created SurePath Capital Partners, I created a company that only does both those things. When I had been a CFO and had been a close advisor to the CEO’s that I’d served and got to work on lots of transactions, then I’m a really happy guy. If I’m the CFO of a company and it’s well capitalized and were not doing acquisitions, and we’re not being acquired – if we’re just kind of running the ship, then that’s not so great for me.

Quick Takes from Mark on…

Thinking out of the CFO box

You need to go way beyond finance. You need to step up and fill other operating capacities.

Relationship between CEO and CFO

Synergy – if the CEO is the technical founder, take on the more outward-facing aspects; if the CEO is outward-facing and a rainmaker, try to take on as much of the internal operations as possible.

Create an informal network of your peers

There are always folks who are a little bit ahead of you in terms of scale and experience and complexity, and you can learn a ton from them. Branch out to other Venture funded CFOs.

Capable management

The whole thing about being a C-level executive in a venture backed company is that your competency and leadership need to scale faster than the company is scaling.

Keeping sight of the bigger picture

Remember to not only work IN the business, but to also work ON it. Similarly, to not just work IN yourself, but also to work ON yourself. Delegate lesser tasks to free up time to work on growing your capacity.

SD: Let’s talk about what it takes for a technology CFO to be successful. You’ve played that role, you’ve advised people in that role, what makes a successful Tech CFO?

MM: Well, I’d say it is the ability to go way beyond finance. I think, when a company isn’t fund raising, the financing role is pretty simple, and you have to find other ways to add value. Often the management teams at start-ups are incomplete and so there’s room to go way beyond finance and fill in other operating capacities. I’ve definitely done that a lot. I’d say within the finance realm, first of all you have to have a very clear understanding of all the nuts and bolts in the business, particularly because often those businesses are burning money and so you must understand ‘good burn’ vs ‘bad burn’. Most businesses these days hinges on profitable unit economics, and so even though the business as a whole might be in the red, if these customers are profitable, and you understand the nuances of customer mass, that’s kind of crucial. And then I would say the ability to translate. For example, if you’d just walk in to an exec meeting and rattle off a bunch of numbers and metrics, it’s sort of somewhat useful, but you have to go way deeper. As an example, if “churn” (the number of people who cancel your service) has moved in one direction, its somewhat useful to give the data points on the movement, but it is far more useful to understand the root cause and give good guidance. So again, it’s being able to go beyond the numbers.

The approach I’ve always taken to the CFO world is to define the role in a way that gives the CEO maximum leverage. What I mean by that is – if the CEO is very technical founder, then I’ve always tried to take on some of the outward facing aspects, so that the CEO would be able to be building and shipping product. Whereas if that CEO is a very outward facing CEO and a rainmaker, then I’ve tried to take on as much as the internal operations as possible, so that person could be out of the office and know that things are still running. To me the CFO is the right hand of the CEO, and therefore you have to govern yourself or kind of define the role in a way that has the most impact on the CEO.

SD: You’ve been a CFO on a full time basis and CFO on part time basis. What’s the difference?

MM: Huge difference. Again, take everything I’ve said about taking on more operating responsibility, in the context of full time. If you think about the core of a business – the core of any business in the technology business is building product and selling product, just to generalize. The rest is in support of that. In that context, finance is always important, but it’s not a core thing. It’s relatively horizontal. It can transfer the same functions from one company to the next. And so outsourcing the core nuts and bolts of finance makes all kind of sense. But where you run into trouble is when you outsource finance to someone, but then try to get that someone to do a whole bunch of other things – that just doesn’t work. So the big difference for me is that when I was full time I was going way beyond the finance role, whereas when I was part time I stuck to the core nuts and bolts of running a very tight back office, investor relations, budgeting, fundraising, reporting, etc.

SD: I’ve asked number of tech companies who are looking for finance help “what do you need?” and they said “well, we would like a Mark MacLeod”. You have a brand to you that says “start-up tech CFO”. How would you recommend they find their own Mark MacLeod?

MM: That’s a tough one. You know it’s funny. In retrospect, it might have taken the hard way to get my experience. My first start up was a client of mine and I came in with absolutely no experience and just kind of stumbled along. And because I was very focused on deals and fund raising in particular; if I didn’t feel like that company was on the trajectory to really grow massively, I’d move on. And that resulted in a bunch of things. I exited positively in a relatively short time frame, or me concluding that they weren’t going to be exiting in a relatively short time frame. But the point of all that is my learning and development was compressed and accelerated by moving to different companies and getting exposure to different start-ups, different stages in their life cycle, and that whole bit. So that’s one path.

I was very lucky because I got into start-ups very early, back in the late 90’s when anyone with a pulse was getting funded. The environment was pretty forgiving. So that could be a path today – someone who has kind of hustled around and has been involved in some fund raising, and has shown a propensity and an aptitude to be able to talk about things that are beyond the numbers.

But I’ll tell you… the whole thing about start-ups and venture capitalists is it’s all about the outliers. And while I’ve been part of some great businesses, the biggest learning opportunities and the biggest development, the most scope and the most exposure is when I was part of the outliers. Like Shopify and Freshbooks. So the point of that is hiring someone with that pedigree, even if they haven’t had the CFO title. If you’ve gone through Shopify’s growth, from 100 to 700 people, if you’ve gone through all the things that come with that and you understand how systems scale and you understand how to do really amazing investor reporting, and how to build sophisticated budgets and how to scale a finance function, that’s amazing experience. I’ve learned through trial and error that QuickBooks falls apart when you cross 100 employees. And then you end up having to go to a NetSuite or an Intact or something. Knowing that coming in, because you’ve come from a place with scale, would be pretty interesting.

So it’s really 2 different profiles. It is someone who is really helpful and has had some exposure through a few different companies so that they can pattern match. Or it’s someone who has come from a bigger company, one that the start-up aspires to be.

SD: Am I correct in saying that nobody can really hire Mark MacLeod because Mark learned it from the companies that he did the work in? I mean, you’re beyond that start-up age CFO that is young and has just enough experience but not too much, who’s not looking to take home too much cash and is more willing to put it down for the future. Do I understand that correctly?

MM: If someone wants to hire a Mark MacLeod, well a Mark MacLeod has been 2 decades in the making and is still being made, you know what I mean? They don’t exist. You have to hire someone who looks nothing like what I look like now. Hire someone who I was like 15-20 years ago, which means you’re really taking a chance. I got in because the environment was so frothy. And I would say that I stayed for 2 reasons – 1 maybe as you said, I don’t look like most CFO’s, because it’s never been just about the numbers for me, it’s always been about the strategic context around the numbers. So it was always the bigger picture. I’d say the thing that really helped make me stand out is I had a huge passion for venture capital. And for getting into the venture community and making deals happen. If a company is running out of money and hiring you helps them get money, then that should really sell itself. But in the early days that’s really how I got into a lot of start-ups. When I was doing the part time CFO stuff, the real sweet spot was that I would take companies and get them ready for the next round of funding, I would raise it for them, and then stay on as their CFO. That’s how I was kind of paying my way. So it’s a different context.

SD: What’s the ideal CFO for you to work with?

MM: I don’t know that there is just one to be honest. If I am helping a company fundraise or helping them prepare for an exit, I think that in both cases the deal will very much be driven by the strength of the management team. It’s not like I simply want a technician in there because I can handle the strategy stuff. I’d be more than happy to work with a very strategic deal-making CFO. I think that doing great big deals is a team sport, not like an individual hero sport. I think I’m equally happy to work with an internal deal maker, as I am to work with someone who’s got super tight back office. I think the takeaway is that one way or the other, we need both. So if the person is just the big deal maker and the back office is not super tight, that’s going to make it harder for me to do what I do. One way or another we have to have both the substance and the spot.

SD: What advice would you give to new CFOs who are just at the start of their career?

MM: Talk to peers a lot. There’s always folks who are a little bit ahead of you in terms of scale and experience and complexity, and you can learn a ton from them. You could also create an informal network, talking to other venture funded CFOs and the portfolio. Makes a ton of sense. I think this is true not just for CFOs but for any role. The whole thing about being a C-level executive in a venture backed company is that your competency and leadership has to scale faster than the company is scaling. And so in that context, having a coach who can help you work through issues and help you scale is super important as well.

SD: How did you make time for important things? Things that were related to your career and employer, but there was no deadline attached to it?

MM: I think I have a certain level of self-awareness. So I knew that I needed to not only work IN the business but also work ON it. And similarly to not just work IN myself, but to also work ON myself. I never have been the kind of technician who is always dotting I’s and crossing T’s. As a result I was able to push that kind of work down to the right level and that gave me capacity to work on growing my capacity, if that makes sense.

I’ve always been a long term planner and thinker. I started my career in public accounting getting the fundamentals. I then went into internal audit consciously thinking about where I need to go for my success. That gave me an understanding of what’s underneath the hood of a company. From there I started to specialize in the functional roles and business partnerships, so I went to engineering and managed an engineering group worth about 120 million dollars. After that, I went into another company and managed a sales organization and was a business partner for sales services and support.

When you start to get into a specialized business like engineering, you look at all the portfolios and investments and really begin to understand how things roll in a company. Similarly, with sales you start to understand what incentivizes salespeople, what motivates them and how you get the most productivity out of them. Then you become more of a generalist and you start to move into and become more eligible for a CFO role. At that point you really have the depth to be able to go down a thousand feet and then come back up specifically when you’re dealing with the executive level management.

Quick Takes from Aidan on…

Growing from Controller to CFO:
A lot of us are very technically and operationally qualified and the next part of that is the chemistry and the synergy that you have with the executive team.

How to move upwards and onwards:
If you build up and broaden your experience and your accomplishments and consistently perform… I think that will open any door.​

Networking and a new job:
We spend so much time trying to build a network and then when we get into a new job we tend to forget about that network.

Why CFO Peer Groups are important:
It’s very important to keep a close check on what challenges other CFOs face in the market these days.

Building your network:
You should value your network and you should always think about building and expanding on your experiences.

You went from an engineering organization to a sales organization, both of which have very different requirements and very different world views. How did you transition at an early age to those perspectives? What did you learn from that?

I suppose I was just fortunate. I got in to the engineering role and the engineering VP at that stage got promoted to the general manager of a business unit that had a value of $1.7 billion dollars. So I was fortunate to move in with the VP and become the general manager’s number one finance person – the CFO. When I moved into the sales company, I specifically moved in as the number two. They didn’t have a CFO at the time and I moved in with the COO. The main concerns they had, operationally in the company, were in getting the financials restated due to the software changes that were going on, specifically around revenue recognition. In the company that I joined, several of the competing companies had their financial statements restated. Fortunately, because of my operational background in external audits and looking at the business side of things, I was able to take that role on and I spent a good year really reengineering the sales organization – specifically from an operational perspective. So that was just a bit of fortune and I just stepped up to the role. And when you actually have a bit of experience behind you, it’s nice to have that exciting challenge.

I’ve seen that a lot of CFOs who – while they were certainly smart – were at the right place at the right time. What was it about you that helped you get to that first CFO role?

I think it’s my assertiveness. It’s a little bit of planning and being willing to step up – having the energy level to step up to the next level and perform. As you start to get in, a lot of us are very technically and operationally qualified and the next part of that is the chemistry and the synergy that you have with the executive team and also with the CEO. It’s that business partnership that makes it all gel together.

What were some challenges you faced when you and the CEO thought differently? What have you done in your career that has made that CFO/CEO relationship work?

I think there are a few you areas that I would look at. The first that comes to mind is the ability to scale a company from, say, a 20 million dollar company to a 100 million dollar company. There are certain roads and paths to take. You would first look at the financial portfolios system or the ERP system and ask: which is the best one to scale? What are the key resources that you need to have? Each time you have to make some decision it impacts the business and may impact the CEO and executive team. So they’re truly critical decisions because they have a long term impact. That’s more the long term side of it.

On the operational side, I have the skills that I need from a sales operation perspective that I can use to go underneath the sales organization and understand the key issues associated with productivity, the sales model, the pricing and so forth. Because of this, sometimes the CEO or the VP of Sales do not see eye to eye with me. Through my perspective on certain things, I can justify it from the numbers, from looking at the facts, looking at trends, building them out and being able to start to perfect models and sales projections. Because of this, I started to gain respect from my peers and especially the CEO and then I moved forward and it got better. Everything started to get better.

What can you share about the process that moved you forward to your new role?

I think the key is networking. If you build up and broaden your experience and your accomplishments and consistently perform – especially in the CFO capacity – I think that will open any door. I think that’s the key to success. In my case, I’ve worked in many companies and I’ve met a lot of VCs and board members. I consistently keep in contact with them and these doors remain opened and the friendship and partnership are there.

One of the VCs on the board here opened up the door for me and connected me with CliQr. From there it just took the normal steps to get the position. I have kept in contact with all the top financial recruiters over the years – whether I am looking for an opportunity or not. If I can touch base, even if it’s only once a year, I’ll try to keep an eye on them and say hello. We spend so much time trying to build a network and then when we get into a new job we tend to forget about that network. And it doesn’t take much to maintain these relationships.

What tool do you use to ensure that you stay in front of everyone you want to stay in front of on a regular basis?

That’s a difficult one. I don’t have any specific tool. I kind of identify it and put it in my calendar on a quarterly basis. I do like sports, though. I tend to see if I can play golf with some of the executives. I might go to an event with them. Some of the banks that I deal with invite me out. For example, one of the financial recruiters is having an event here and it’s typically at an event like that where I catch up with my peers in the industry and have a drink and socialize.

Another process that has worked for me in the past is I will meet with CFOs on a semi-annual basis.We go to lunch and without getting into numbers we discuss the business process and we go into networking. The world of finance changes an awful lot. Technology changes and business and financial market changes. It’s very important to keep a close check on what challenges other CFOs face in the market these days. I enjoy that. We spend time together sitting around the table and then we reconvene in another six months’ time. It’s a great forum for keeping pace with what’s going on in the markets.

What are you excited about joining CliQr?

CliQr represents a fundamental shift in the IT market. We’ve seen the internet bring a lot of change. It has changed almost everything. The cloud is today’s internet in my mind. It has the ability to change everything about the way business interacts with information technology. CliQr is pivotal in this change. It plays a major role. It’s a transformation from the old rigid data centers to today’s desire to logically place applications across diverse environments and include the data centers across private and public clouds all in one place. This is what CliQr does. In my mind, the market’s real, the product is very very real and we’ve got really smart investors in the company (like Google Ventures and Foundation Capital -to name a couple). My colleagues here are very smart. It’s a nice working environment. To me, these are all key ingredients to success.

What are some of your objectives to help the company along and make a bigger impact in its success?

The major one is to scale the company. CliQr is at the point where it has gone through with a Series C and financing and we’re at that stage of growth. The next stage is global expansion and building out the enterprise and the sales into the various geographic regions. Those are the major challenges and in confronting them I bring in head counts and business processes. I did the same thing at Gigamon, where I expanded and brought in a new ERP system for a manufacturing company and broadened the sales geographic regions.

Where do you hope to take this?

I think one would always love to take it to IPO. Companies are not sold now, they are bought. So the strategic intention is to build this up to a company that can go IPO. I have not brought a company to an IPO process yet. I’ve filed an F1, but I’ve never been on the other side as a public CFO.

What advice would you give people trying to build themselves up on a path to success as CFO?

You should value your network and you should always think about building and expanding on your experiences. Try to look at the end of every year and assure that you’ve added some accomplishments to your resume or background. I think it’s important to meet regularly and get a pulse check with your peers to see if you’re keeping touch with how things are working out. Specifically, your skill set versus the market. Finally, I think it’s good to follow smart money. These days we’ve got some super VCs in the Valley. They do an amazing job and when you can actually get a line through to these VCs, they truly do mitigate the risk that we have as CFOs. In looking at opportunities, these are the people you should start to follow.

Since the release of my book, Guide to CFO Success in 2014, I have been reminding CFOs that they need to build and develop their relationships within their organization.

Last fall, when speaking with some of my key Chief Financial Officers that I keep in regular touch with, I was reminded that while CFOs are lonely, there is a solution to their loneliness. These conversations with my Chief Financial Officers led me to develop my CFO Peer Groups.

Starting this past winter, I created 3 groups of 10 CFOs from across the USA and Canada, with the express goal of getting them to talk, learn, share and network with each other. Each month we had scheduled conference calls, with questions from CFOs sent to the group in advance that prepared the group. These CFOs were able to call on their peers both during and outside of our meetings on the issues and challenges facing them.

This fall, we will have our first in-person meeting in Chicago. At this meeting we will take our phone conversations to the next level and set the stage for where we take this in 2016.

Here is a sample of some of the discussions we have had so far this year in CFO Peer Group.

Topic addressed

Question discussed

The ability to grow while stabilizing the core business.

How to grow while investing in the core and changing the culture?

Scaling the organization to handle growth efficiently and profitably.

What changes have you made both to the finance organization and encouraged throughout the organization to deal with top line growth year-over-year in the 20%+ range.

Having sufficient cash for all initiatives and not wasting time or money to get there.

What strategies have you used that have had success or failure? Why?

Integrating 4 recent acquisitions

How have you dealt with integration challenges? Staffing, IT, timelines, etc.

Scaling without rapidly increasing costs and maintaining quality

What systems, processes or frameworks have they utilized to be successful in the past?

Best practices for managing tight cash flow.

How do you redirect the culture of an organization to be conscience of tight cash flow when the CEO wont.

Describe your day to day activities and how this has changed over the course of your tenure

What are your thoughts on how the role of the CFO evolves over time and how do you build your team such that you focus on the highest priorities? What functions report to you?

Outsourcing of non-strategic functions

To what extent have you outsourced? What did you outsource? What was kept in house? Which outsource partners would you recommend?

Acquisition Process

Do any of you have a well defined non confidential process around acquisitions that cover everything from target evaluation, negotiations, financing, due diligence and all legal documentation through purchase? Or is it more ad hoc project planning as circumstances warrant? In either case are roles and responsibilities clear and what role does the CFO and his / her organization play?

The Finance Team

How do you ensure a strong, engaged team? How do you ensure they are treated with the respect they deserve by the non-finance departments? What are some good tips and tricks for finding and retaining a strong team? How do you prevent burnout and staff turnover? How to you create a culture that values the finance staff and the role that they play?

Building your Finance and Accounting team

Do you have separate Accounting and FP&A functions? Do you lead each of those functions or do you have a #2 Executive in your department that manages these functions (or others?) If so,

Business Unit Structure

Have you structured business units in a complex multi-product environment? If so, how did you do it and what worked well and what didn’t? Would also like to know how you structured the management of the business units

I am currently focused on CyberSecurity and efforts to be in front of the issue.

What best practices have you put in place recently? Have you reviewed insurance coverage for security breaches? Recommendations for Outsourced CTO services.

Asia expansion.

Anyone have experience with hiring/establishing a local presence in Asia?

Budget Planning

Has anyone used Zero Based Budgeting as a means to get deep into spending areas? If so, was it worth the time and how did the process

Internal Audit Process

Curious on rigor of Internal Audit Process and role of group within your company (financially vs. operationally focused, approach to audit planning, consultative vs. enforcers, etc.)?

These are only A FEW of the discussions we have had in CFO Peer Group so far in 2015.

As the year progresses, my CFOs will be sharing, learning, growing and networking, both in our continued conference calls, as well as at our first in-person meeting this November in Chicago.

My questions to you

As a CFO, wouldn’t you want to be able to share these types of questions with your peers?

As a CEO or Board member, aren’t these the types of things you want your CFO to have the support for?

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I noticed in the news that the CFO you hired with big fanfare only a couple of months ago has left. Your press release quoted your recently new and currently past Chief Financial Officer saying that he is returning to his previous employer because the role is too good of an opportunity to pass up.

I have never been Chief Executive Officer of a publicly traded billion-dollar revenue company. I do imagine, however, that the conversation your new CFO had with you must have felt like a kick in the gut, among other places. I am sure that it was not a good day for you.

You know more than most that the past can never be changed. The question remains what can be learned from this ordeal.

While I was not involved in the drama that evolved both before, during or after this incident occurred, I have seen it happen too many times in my weekly coverage of CFO Moves across the US, Canada and the UK. Here are some pointers that you can give to other CEOs so that this does not happen to them.

1) Don’t fall in love with the wrong candidate. Technical, interpersonal, leadership, communication skills are all great. But to hire a great CFO to take you to the next level, you need to connect with motivation of the candidate.

2) Be honest with yourself. You may run a great company but your CFO to be is coming from an ever better environment, understand why they are saying yes. If you know you are runner-up, you may find yourself holding the bouquet at the alter.

3) It’s not just about money. Never, ever think that a CFO takes a role just because of the compensation package. Sure, CFOs are money motivated, but once basic needs are met, other needs are much more important. (Maslow’s hierarchy of needs is the same for CFOs, except their basic needs are different than most).

4) Select your executive search partners carefully. I know that you understand the value of working with retained executive search for hiring your key leaders. Not all search firms are created equal, and not always should a search firm you have used in the past be the one you use for a critical search like your next CFO. One key differentiator you search firm needs to have is the ability to truly connect with the executive candidates. When looking for a Chief Financial Officer, a great retained search team has the ability to act as an advocate for the needs of the CFO candidate. The closer your recruiter can become a true partner to your CFO candidate, the better opportunity you will have for hiring a CFO where you will be his or her first choice.

If there is a cloud to this silver lining, it is that your recently retired CFO is available to cover until you hire again. I wish you all the best in hiring your next CFO. This time, I know you will make a better choice.

Wishing you continued success,

Samuel

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With 2015 approaching, many senior financial executives are thinking about what the new year will mean to their workload; deadlines, projects, bonuses (both to pay and to be received), staffing concerns and loads of other stresses. The thoughts are all about what needs to get done and what they are ultimately responsible for.

For the busy and stressed Chief Financial Officer with the weight of the world (or at least their company) on their shoulders, the approach of the holidays and the New Year should give you pause. Think about how to make things better.

There are 24 hours in a day, and, whether you plan for it or not, they will always be filled. As my CFOs told me when writing Guide to CFO Success, more than three-quarters of CFOs are putting in more than 110% of their effort into their role as senior financial executive in their organization.

CFOs are expected to accomplish more than just the day to day accounting and finance tasks. They are expected to be leaders. They need to lead their finance team, lead their colleagues at the executive table and lead the company as a whole. You need to remember that, as CFO, your input is needed to help the company make sound strategic and operational decisions.

For eight out of ten respondents, the finance function is a strong, if not dominating, influence on strategic and operational decisions. (See Figure) The finance function is involved with strategic and operational decisions at nearly every company, and 80% of respondents say that the finance viewpoint is either an influential factor or the determining factor.

The expectation is that, as leader of Finance, your opinion counts. What you have to say is influential within the company. Yet too many CFOs feel that they are getting stuck in the details.

How can a CFO get unstuck and take their game to the next level?

Formal training

As an experienced professional, you know you can benefit from continued education that makes a real difference to your career and your employer. Options that can benefit you while meeting your busy schedule can include:

An Executive MBA – This could be an excellent tool to move you beyond the technical you have relied upon to date. Many Executive MBA programs are tailored to the busy executive and should not impact your work schedule much.

CFO oriented Leadership Programs – An executive training program focused on taking a CFO to the next level might be ideal for the senior finance executive that either already has an MBA, or feels the need to build their career knowledge based with a group of similarly experienced individuals. Programs like the Queen’s CFO Leadership Beyond Finance Program, in partnership with FEI Canada, can be an ideal solution.

Online training – When you know what skills you need to improve on and which you need to learn for the first time, online courses can be an ideal solution. If your company has access to leadership and soft-skill courses, make sure that you take advantage of this opportunity. You could also look at service providers like Proformative Academy to give you a choice of options that will suit your training needs, as well as those of your finance team.

Peer Groups

Chief Financial Officers are positioned at the intersection of their finance team, their executive colleagues, and the CEO and the Board. Being at this junction in their organization can make it difficult for them to learn from and share with others. Many CFOs have told me that they feel lonely in their organization, and don’t have people to discuss their challenges with.

For 2015, I am creating CFO Peer Groups for a select group of CFOs across the USA and Canada. These selected Chief Financial Officers will commit to work together, learn, share and network with each other. I am excited to facilitate these groups in 2015. I expect that the participating CFOs will take their game up to the next level.

Executive Coaching

Each of the CFOs that I have worked with as their executive coach has been able to step up their game. Executive coaching for the CFO (or future CFO) can be very beneficial to the executive and the company they work for. It is my experience that, like athletes, CFOs perform better with a coach who is well suited for them.

As we approach 2015, it is time to take your game to the next level.

Whether you choose to take the formal approach to learning, get together with your peers to learn, share and network, or engage an executive coach, any step you take to improve yourself and your game is a good step.

Being Chief Financial Officer can be stressful. The responsibility that the CFO bears for the company they work for is not a 9 to 5 job. Most CFOs I have met and spoken with agree that the role takes up most of the hours they are awake, and even some of the hours they should be sleeping.

I recently asked my CFO Advisors what top their top 3 concerns that keep them awake at night. After reviewing their responses, here are the top 3 current issues that are keeping CFOs from getting a good night sleep.

#3 – Team

CFOs are worried about their team. Some CFOs are concerned about how to continue to grow and motivate their staff. Others are losing sleep worried about retaining the staff they need or dealing with the aftermath of unforeseen resignations. There are some CFOs who are unsure of how they will succeed in acquiring and developing the new talent they need to make their team even better.

Regardless of the type team based challenges facing the CFO, they know that they can only be successful if their team is strong enough to support them. When the finance team is not giving the CFO what she needs to succeed, this can cause anxiety and sleeplessness for even the most experienced CFO.

#2 – Growth

Growth can be an issue for many CFOs. Or, rather, the lack of growth is the real issue. Most for-profit companies define success as making more money, and for the Chief Money Counter, growth drives corporate financial success. It is the Key Performance Indicators of this growth that informs the CFO if the company will reach their targets or not.

When companies are continually growing their revenue and profit, all is good. Few companies though, do this regularly and consistently. Financial success for most organizations can only come when sales rise and profitability continues an upward trend. For the CFO, who knows they are king when the results are good, and the court jester when the results aren’t, losing sleep over growth is understandable indeed.

#1 – Cashflow

Cash is King. The ultimate responsibility of whether there is enough cash to do what needs to get done rests with the Chief Financial Officer (even when their team does the technical work). CFOs are concerned with cash from all sides, whether they are collections issues, access to capital and lending or how to make decisions about allocating cash in the most effective way.

Cash is, by far, the most common issue that is keeping my CFO Advisors awake at night. What is interesting about this response is that cash was a concern for most of my CFO Advisors, yet they all come from different industries and company sizes. It seems that cash issues are a challenge in most, if not all companies. While the type of cash challenges will certainly change based on the situation facing a company and its industry, most companies, and therefore most CFOs, are anxious and losing sleep over cash.

As an executive search professional that focuses on the office of the CFO, I am involved with the hiring of Chief Financial Officers for companies. Unless I am working to help a company hire their first CFO, the mandate I have is to replace a current CFO or a Chief Financial Officer that has left.

While only having the time to work on a handful of CFO searches at a time, you may know that I track CFO movement on my CFO Moves Blog. When I combine my personal direct involvement with helping companies hire their Chief Financial Officer with my tracking of hiring and unhiring of CFOs across the US, Canada and the UK, I see many CFO getting replaced.

You can understand that this a topic that interests me. And if you are reading this, the topic probably interests you as well.

I came across a very interesting academic working paper, CFO Succession and Corporate Financial Practices, authored by Ellen Engel, Feng Gao and Xue Wang, that was published in October 2013. This paper looks at reasons and financial reporting consequences of CFO successions. The document is a properly researched academic paper, and makes for an interesting read if you are academically inclined.

We examine the determinants and financial performance consequences of Chief Financial Officer (CFO) successions. We argue that if internal monitoring mechanisms are effective, there should be a greater probability of forced CFO departures in firms with poor financial reporting and capital management performance, and resulting improvements in financial practices following forced turnovers. We test these hypotheses over the period 2002 to 2008. We find that

(1) the incidences of accounting restatements and debt covenant violations are significantly associated with the probability of forced CFO turnovers;

(2) firms are more likely to hire successor CFOs from outside the firm following accounting restatements, especially those due to irregularities;

(3) the hiring of outside CFOs is associated with improved financial reporting quality.

Further, these findings are concentrated in firms with majority independent boards, suggesting that outside directors play a greater role in monitoring CFOs than inside board members.

Initial Public Offerings were hot commodities in the early and mid oh-oh’s. Most finance leadership reading this blog remember those days well, and some of you did very well financially because of it.

The recession that occurred towards the end of the last decade put a stop to that IPO train. Companies needing capital for growth had to look elsewhere, and many companies were unable to succeed because this driver of growth dried up.

For the past few months I have been hearing the rumble of the oncoming IPO train. A number of CFOs I have spoken with in the past months have shared with me that they are being given the strategic responsibility to be ready for when the IPO market comes back. There is a feeling of cautious optimism that this catalyst for economic growth will soon be back.

How can a CFO prepare for the talent challenges to come?

One of the biggest challenges that an uptick in the IPO market will face is that there is a small pool of talented mid-level professionals with relevant and recent IPO experience. The amount of work needed to be IPO ready is significant. When the IPO dam breaks, many companies will be rushing to get their IPO done. If the talent challenges are not planned properly, companies will have to be more reliant on expensive external resources (think audit and law firm rates). Companies who properly plan for their talent needs in advance will be able to go public earlier, which could be very beneficial as well.

Another significant challenge to companies that are currently private is that the cost of being public is expensive. A CFO needs to ensure that they have the leadership and professionals on staff that can deliver the quantity and quality of timely and correct information necessary to be considered a well-run public company. CFOs bear the burden when their finance team is not able to deliver accordingly.

CFOs who have been mandated to prepare for an upcoming IPO by their board need to have a talent plan to ensure they can meet their needs for going public and staying public. This plan for talent acquisition, development and retention is necessary to balance the costs of going public and staying public.

This talent planning business will not be easy. But those that start planning now will be at an advantage.

CFOs, get ready. You could be in for a very bumpy ride on the IPO Express.